After a decade of navigating a massive patent cliff, Big Pharma firms are reaching the other side with rich dividend yields and opportunities for growth. The case for Merck, Pfizer and Novartis.

Not every financial cliff is a dire threat. Just ask the big drug companies, which have spent the past decade confronting a patent cliff. At last, that cliff is starting to look more like a particularly menacing pothole.

This year, branded drugs with yearly sales of $36 billion will face generic competition for the first time -- a record, according to a recent report from CLSA, a unit of French bank Crédit Agricole. Yet shares of...